Nigeria to ramp up coal production for electricity generation

THE Nigerian government is moving full steam ahead to ramp up coal production to deal with erratic power supply in the country. The plan is to ensure that 30 per cent of the country’s electricity comes from coal.

But the government has been careful in handing out licences for mining coal for power generation. “One of the processes for the issuance is applicants must have power generating licences before they can be granted licences for coal mining in the country,” the Minister of Mines and Steel Development, Kayode Fayemi, said recently

“We have dictated that coal deposits in the country would only be awarded for power and licences for mining of coal deposits would only be awarded to those who want to generate electricity. Since the inception of this administration, no licence for coal has been awarded which is not for the purpose of power generation.

“So, if you acquire a licence for mining coal you have to also have that for power,” Fayemi added.

According to Foraminifera Market Research, a Lagos-based market research company, Nigeria’s coal is one of the most bituminous in the world owing to its low sulphur and ash content and therefore the most environmental friendly. This would fit in with the campaign for cleaner energy sources, the company said, adding that nearly three billion tonnes of indicated reserves had been identified in 17 coalfields, and with over 600 million tonnes of proven reserves in Nigeria.

The country currently generates about 3,000 megawatts of electricity and it has been estimated that it would require at least 40,000 megawatts to support its moves to be among the top 20 economies in the world by 2020. Experts estimate that a coal powered plant in Nigeria would cost one-sixth of the amount of gas and since coal is also used to power railways in the country, Foraminifera says coal mining and processing is highly needed.

Addressing mining communities and companies in Enugu recently, Fayemi said that the government would partner with the African Development Bank (AfDB) to fund coal projects in the country. “While the $150 million World Bank loan recently approved for the sector may not cover coal projects, arrangements have been reached with the AfDB to fund coal projects in order for the country to take advantage of its huge coal reserves to solve its power problems,” he said.

Fayemi added that the AfDB funding would be made available to investors who could establish coal power plants that generate as much as 500 megawatts. “We have an existential need for power in this country, and we have to do something about it and we can get power from coal which we have in abundance.,” he explained.

Fayemi said he wanted to see the private sector setting up coal power plants to provide electricity for their industries, noting that the Dangote Group, the country’s largest cement producer, is one such business.

The government’s plan is looking favourable following the recent release of the International Energy Agency’s (IEA) World Energy Outlook 2017 highlighting the strides made in developing and emerging Asia, where coal has been crucial to millions of people gaining access to electricity. The report shows that coal has delivered nearly half of the improvement of that past 16 years. In India alone, 500 million people have gained access to electricity since 2000, almost doubling the country’s electrification rate – 75 per cent of this came from coal.

Despite legitimate concerns about pollution and greenhouse gas emissions, coal will continue to be significant in the future, the IEA report said. It urges “greater efforts…by government and industry to embrace less polluting and more efficient technologies to ensure that coal becomes a much cleaner source of energy in the decades to come”.

The IEA report was welcomed by the World Coal Association (WCA), which is holding a forum in London next week on the link between coal and the Sustainable Development Goals (SGDs). WCA Chief Executive Benjamin Sporton said: “It’s in powered up grids in developing Asia and Africa where governments have identified a role for low emissions coal technology to meet their integrated energy access and climate objectives.

“Twenty-four countries including major economies such as India, Nigeria and throughout Southeast Asia have identified low emissions coal technologies as critical to powering their economic development while reducing emissions in their Paris Agreement pledges.”

Mr Sporton added: “This highlights the need for investment in a range of technologies, including coal.

“There is a perception that global energy access and climate objectives can be achieved without coal, a claim this report contradicts. That is why the World Coal Association continues to call for international support from development banks and other institutions for low emission coal technologies to be deployed where they are needed.”